Council mortgage holders twice as likely to be in arrears than others

HOMEOWNERS who received a mortgage from their local council to buy their home are twice as likely to be in arrears than other mortgage holders.

More than one-in-seven such homeowners is in arrears, figures show. These include former local authority tenants who bought their homes under tenant purchase schemes and other homeowners who bought private homes under affordable housing schemes.

Figures from the Local Government Management Services Board show that mortgage arrears in this sector stood at 15.08% at the end of 2009 — the most recent figures available. It is likely figures have increased significantly since.

In contrast, latest figures from the Central Bank show that 6.3%, or 49,609, of bank and building society mortgages were in arrears for more than 90 days at the end of March, up from 5.7% at the end of December.

Sinn Féin Finance spokesman Pearse Doherty said that in some cases, people who availed of local council mortgages are paying interest of up to 10%. Many of these people would have bought their houses during the 1980s and so have smaller mortgages than those who bought during the boom.

“These people are people who were on very low incomes when they received their mortgages from the council. To qualify for a loan from the council, you had to have been turned down on three occasions by other lenders.

“These high arrears rates are just reflecting the cuts to household incomes, unemployment and the wider recession,” said Mr Doherty.

Sinn Féin say it has no evidence of local authorities pursuing aggressive repossession strategies.

Last year, the previous government issued guidance to local authorities that mortgage arrears were to be handled “in a manner that is sympathetic to the needs of the particular household, while also protecting the position of the local authority concerned”.

A submission on local authority mortgage lending to the Government’s expert group on mortgage arrears and personal debt last year indicated that local authority mortgage lending accounts for 1.35% of the total mortgage book in Ireland.

According to the figures included in the submission, the total mortgage book of Ireland’s 34 local authorities stood at €1.62 billion at the end of 2009.


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